Maybe some pull back after recent fall? But it was mostly given and has priced in I guess. In fact today FIIs were net buyers and DIIs were sellers. Not sure what info our DIIs have that they are cashing out.

Maybe some pull back after recent fall? But it was mostly given and has priced in I guess. In fact today FIIs were net buyers and DIIs were sellers. Not sure what info our DIIs have that they are cashing out.

SGX Nifty was down .. but now it’s 20+ Let see tomorrow how Indian market react……

Maybe some pull back after recent fall? But it was mostly given and has priced in I guess. In fact today FIIs were net buyers and DIIs were sellers. Not sure what info our DIIs have that they are cashing out.

SGX Nifty was down .. but now it’s 20+ Let see tomorrow how Indian market react……

Maybe some pull back after recent fall? But it was mostly given and has priced in I guess. In fact today FIIs were net buyers and DIIs were sellers. Not sure what info our DIIs have that they are cashing out.

SGX Nifty was down .. but now it’s 20+ Let see tomorrow how Indian market react……

GST demystified

How is India’s tax system structured today?

The constitution divides taxation powers between centre and states. Both levels of government have some exclusive areas where they can levy tax. Income tax, which includes tax on company profits, is the exclusive domain of central government. These taxes are referred to as direct taxes.

INDIA-ECONOMY-TAXATION

Indirect taxes are taxes levied on manufacture of goods, provision of services and consumption. In India, generally speaking, indirect taxes levied on manufacture of goods or provision of services are the exclusive domain of central government. Taxes on consumption are the exclusive domain of state governments.

What is the problem with this arrangement?

There are two important problems with the current arrangement.

First, keep in mind that some good such as a shirt has to first be manufactured before it is consumed. The central government, therefore, levies its indirect tax called central excise at the factory gate. Subsequently, a shirt reaches a retail outlet and is bought by a consumer. The state government, at this stage, levies a tax on consumption dubbed value added tax (VAT). So, we have a tax at the factory gate which adds to the cost of the shirt and another tax on the final price.

Since states have their exclusive domain on consumption tax within their borders, they treat goods coming from other states as “imports.” For example, if a shirt maker in Uttar Pradesh buys dye in Bihar, he would have paid central excise and Bihar’s state taxes on the product. On this cost, Uttar Pradesh government would levy its tax if the shirt is sold in the state. If the shirt is sent across Uttar Pradesh’s border and sold in Delhi, an “export” tax called central sales tax is collected by UP.

As the example suggests, India is politically one country, but economically it is fragmented. There are multiple taxes when there is commerce across state borders. Consequently, it increases costs for everyone and makes economic activity within India for Indians complicated.

How will GST help?

Goods and Services Tax (GST) is an indirect tax reform which aims to remove tax barriers between states and create a single market. For that to happen the constitution first needs to be amended to remove different layers of governments’ exclusive powers to levy taxes. Once this step is taken, the tax barriers between states, and centre and states will disappear.

How will it help consumers?

Today consumers have no idea about the extent of taxes they pay on goods. If you get a bill after buying merchandise which gives the extent of VAT you have paid, it is an understatement of the actual tax you have paid. Remember, well before merchandise reached the retail outlet, the central government has collected excise duty. The extent of excise duty is not mentioned in the bill.

Therefore, today it is reasonable to assume we pay well over 20% tax for most merchandise we buy.

In GST, consumers should benefit in two ways.

First, all taxes will be collected at the point of consumption. It means that if a shirt is taxed at 18%, it will include both central government’s taxes and state government’s taxes. Transparency in taxation should deter governments from indiscriminately increasing taxes as there is bound to be public backlash.

Second, once barriers between states are removed, we as consumers will not end up paying “tax on tax” which is what happens when goods move across state borders.

Atal Bihari Vajpayee’s big dream project in the year 2000.
Narendra Modi, his great shishya, executes it finally in the year 2016.

Rajya Sabha passes GST bill after 2 years of debates and deliberations. Now with a few small steps at state level, we are looking at GST era India in mid 2017.

With GSTN, a huge digital network coming up to take care of central GST and state GST in 2017, we are looking towards a single tax scheme for the entire country on goods and services side.

By the way, GST is India’s biggest indirect tax reform since 1947!! Yes, it is that big. Rejoice!

It took huge efforts by the govt to ensure everyone is happy with the bill. A reform that should have come 20 yrs ago finally passed. This GST bill was opposed by many states like TN, Kerala, Westbengal Gujarat etc because UPA didnt accept state demands. However this govt took every state govt into confidence after series of meetings. So congress who was trying to block it rajyasabha had no place to hide. Many people dont that congress ruled state govt also opposed UPA’s GST bill because there was consensus.

Can u all dimers, tell the advantage and disadvantage of this bill for Common Man

there is many advantages and disadvantages.. like home , car , nd daily essential item cost quite decrease where online shopping we need to expens more.. this is simple two eg. but for more u should Google.. definitely u will get a list of this..

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